Social justice: The link between trade liberalisation and sub-Saharan Africa's potential to achieve the United Nations Millennium Development Goals by 2015

Copyright © 2008 Netherlands Institute of Human Rights (SIM).The possible impact of the unintended worst possible effects of the current multilateral WTO sponsored trade liberalisation project on Sub-Saharan Africa’s potential to realise the Millennium Development Goals (MDGs) by the target date of 2015 is examined. The article shows that the WTO’s current approach to trade liberalisation is nurturing and strengthening economic inequalities between and within economic regions of the world and also between and within States themselves without taking any steps to mitigate this difficulty. The article recommends the integration of ILO and WTO dynamics to ensure human development oriented wealth maximisation under the WTO trade liberalisation regime. In this sense the ILO would become the broker and insurer of equality in the dignity of labour between Sub-Saharan African workers and other workers of the world, increasing thereby the chances for Sub-Saharan African States to achieve the MDGs by the target date of 2015

Interplay between topology and dynamics in the World Trade Web

We present an empirical analysis of the network formed by the trade relationships between all world countries, or World Trade Web (WTW). Each (directed) link is weighted by the amount of wealth flowing between two countries, and each country is characterized by the value of its Gross Domestic Product (GDP). By analysing a set of year-by-year data covering the time interval 1950-2000, we show that the dynamics of all GDP values and the evolution of the WTW (trade flow and topology) are tightly coupled. The probability that two countries are connected depends on their GDP values, supporting recent theoretical models relating network topology to the presence of a `hidden' variable (or fitness). On the other hand, the topology is shown to determine the GDP values due to the exchange between countries. This leads us to a new framework where the fitness value is a dynamical variable determining, and at the same time depending on, network topology in a continuous feedback.Comment: Proceedings of the 5th conference on Applications of Physics in Financial Analysis (APFA5), 29 June - 1 July 2006, Torino (ITALY

Inequality, a scourge of the XXI century

Social and economic inequality is a plague of the XXI Century. It is continuously widening, as the wealth of a relatively small group increases and, therefore, the rest of the world shares a shrinking fraction of resources. This situation has been predicted and denounced by economists and econophysicists. The latter ones have widely used models of market dynamics which consider that wealth distribution is the result of wealth exchanges among economic agents. A simple analogy relates the wealth in a society with the kinetic energy of the molecules in a gas, and the trade between agents to the energy exchange between the molecules during collisions. However, while in physical systems, thanks to the equipartition of energy, the gas eventually arrives at an equilibrium state, in many exchange models the economic system never equilibrates. Instead, it moves toward a "condensed" state, where one or a few agents concentrate all the wealth of the society and the rest of agents shares zero or a very small fraction of the total wealth. Here we discuss two ways of avoiding the "condensed" state. On one hand, we consider a regulatory policy that favors the poorest agent in the exchanges, thus increasing the probability that the wealth goes from the richest to the poorest agent. On the other hand, we study a tax system and its effects on wealth distribution. We compare the redistribution processes and conclude that complete control of the inequalities can be attained with simple regulations or interventions

Productivity and the dollar

This paper investigates the role of shocks to U.S. productivity and demand in driving the real value of the dollar, and the dynamics of the U.S. trade balance. Using sign restrictions based on robust predictions by standard theory, we identify shocks that increase domestic labor productivity and output in manufacturing (our measure of U.S. tradables), relative to an aggregate of other industrial countries including the rest of the G7, while driving down (up in the case of demand) the relative price of tradables (in accord to Harrod-Balassa-Samuelson effects). Consistent with previous results based on different methodologies, we find that positive productivity differentials raise U.S. consumption and investment relative to the rest of the world, and deteriorate net exports; both the U.S. real exchange rate and the U.S. terms of trade appreciate in response to these shocks. Demand shocks also appreciate the dollar, but have negligible effects on absorption and the trade balance. These findings question a common view in the literature, that a country's terms of trade deteriorate when its tradables supply grows, providing a mechanism to contain differences in national wealth even if productivity level do not converge. They also provide an empirical contribution to the current debate on the adjustment of the U.S. current account position. Contrary to widespread presumptions, productivity growth in the U.S. tradable sector does not necessarily improve the U.S. trade deficit, nor deteriorate the U.S. terms of trade, at least in the short and medium run.Trade ; Dollar

GLOBAL SOCIAL STATUS, NATIONAL SPIRITS OF CAPITALISM, AND ECONOMIC DEVELOPMENT

This paper constructs a global economic growth model with endogenous social status, endogenous preferences, and wealth accumulation. The economic system is based the Solow model, the Uzawa two-sector model, and the Oniki-Uzawa trade model. We base our approach to measuring social status on some ideas in the literature of economic growth with endogenous growth. The model is specially based on a model proposed by Zhang (2016). This study considers relative social status as a function of a country’s relative wealth per household with the global average per household wealth. It treats time distribution between leisure and work as endogenous variables. The world economy is composed of any number of national economies and each national economy consists of one capital goods sector and one consumer goods sector. National economies differ in social status, preferences, spirits of capitalism, and productivities. We build the model for J -country world economy and express the dynamics with J differential equations. We simulate the movement of a 3-country global economy and carried out comparative dynamic analysis with regard to some parameter

Your beggarly commerce! Enlightenment European views of the China trade

This article studies the European confrontation with and conceptualization of the China trade in the early-modern world, and in particular during the Enlightenment. International trade was of central importance to Enlightenment European conceptions of wealth and European intellectuals and a broader audience of popular authors, merchants and interested parties hotly debated international trade policies. In these debates, China was largely portrayed as having a more cautious, restricted approach to foreign trade. This contrast between the optimism for trade and rejection from the Chinese led to a consistent expression of frustration in many European sources. The narrative of Chinese isolation, however, should not be removed from the wider context of eighteenth-century views on the China trade. Recent scholarship has questioned the dominance of the idea of an isolated Chinese state. Revisiting eighteenth-century sources in light of these new perspectives, it is clear that early-modern European discussion of the China trade reflected a wider variety of views than simple frustration with Chinese restrictions on trade. The paper concludes that the narrative of China’s isolation should be seen as only one part of a wider picture of the China trade and eighteenth -century observers were very much aware of the complex dynamics involved in the China trade

TOURISM, TRADE AND WEALTH ACCUMULATION WITH ENDOGENOUS INCOME AND WEALTH DISTRIBUTION AMONG COUNTRIES

The purpose of this study is to study dynamic interactions among economic growth, structural change, international trade and tourist flows. It builds a multi-country growth model with endogenous wealth accumulation and tourism. The model is unique in that it introduces endogenous tourism within a general dynamic equilibrium framework. The model is built on microeconomic foundations. It not only integrates the three well-known Solow growth model, Oniki-Uzawa trade model, and the Uzawa two-sector model, but also introduces tourist flows between economies for any number of national economies. After building the model, we demonstrate that the motion of the -country world economy can be described by  differential equations. We also simulate the global economy with three countries, showing that the world dynamics has a unique equilibrium. We carry out comparative dynamic analysis with regard to one country's total productivity factor, the propensity to save, the propensity to tour other countries, and the  population

Natural Resource Abundance and Economic Growth in a Two Country World

We investigate the Ramsey-like dynamics of nonrenewable resource abundance on economic growth and welfare in a two country world. One country is endowed with a non-renewable- resource Otherwise, countries are identical. The one country result of Rodríguez and Sachs (1999) that the initial stock of the resource influences negatively the GDP growth of the resource-rich country, is shown to not hold in general. The endowment of the nonrenewable resource can have an initial positive effect on the growth rate of the resource-rich country provided the elasticity of the initial price of the resource with regard to the initial stock of the resource is greater than minus one. The ratio of the consumption levels of the two countries are shown to be constant over time, and determined by the ratio of initial wealth. An analytical solution of the model allows us to indicate how accumulable and depletable assets affect per country welfare and income growth. For this case we demonstrate that a technological change -that is nonrenewable resource saving- can benefit the resource-rich country’s relative welfare.Growth, Development, Non-renewable Resources, International Trade

CORPORATE POWER: THE BEAUTY OR THE BEAST?

During the postwar decades, the world economy was visibly changed by the more manifest presence of the multinational corporations; multinational companies, as the main vector of the direct investments, exert a major impact on the location or relocation of economic activities, the pattern of international trade, the dynamics of the national economies, the labor productivity etc. MNCs have become important sources of technology, capital, and knowledge; their activity has a significant impact on the global distribution of wealth. Strengthening the role of multinational corporations in the global economy has fueled numerous debates in the academic circles, particularly with regard to their effects on the host economies, but also to the challenges they launch on the balance of power and the position of the national states